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CONTINGENCIES AND COMMITMENTS (Block) | 6 Months Ended
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Jun. 30, 2015
Commitments And Contingencies Disclosure Abstract |
Commitments And Contingencies Disclosure Text Block | 10. CONTINGENCIES AND COMMITMENTS Contingencies The Company is subject to various outstanding claims which arise in the ordinary course of business and to other legal proceedings. Management anticipates that any potential liability of the Company, which may arise out of or with respect to these matters, will not materially affect the Company’s financial position, results of operations or cash flows. There were no material changes from the contingencies listed in the Company’s Form 10-K, filed with the SEC on March 2, 2015. Commitments Completed Acquisition - Lincoln On July 16, 2015, the Company completed its transaction to acquire under a Stock Purchase Agreement (“SPA”) with The Lincoln National Life Insurance Company the stock of one of its subsidiaries, Lincoln Financial Media Company (“Lincoln”), which indirectly holds the assets and liabilities of 15 radio stations serving the Atlanta, Denver, Miami and San Diego markets. The purchase price was $105.0 million of which $77.5 million was paid in cash and $27.5 mi llion was paid with the Company’s issuance of new perpetual convertible preferred stock. The SPA originally dated December 7, 2014 and subsequently amended, provides for a working capital credit to the Company of $2.7 million. Other than in Denver, the Company does not currently operate any other stations in these markets. The SPA provides for a step-up in basis for tax purposes. Merger and acquisition related costs of $3.8 million and $2.0 million were expensed as a separate line item in the statement of operations for the six and three months ended June 30, 2015, respectively. The Company used the proceeds from borrowings under its Revolver of $42.0 million and cash on hand to fund the cash portion of this transaction. The Department Of Justice (“DOJ”) is one of several government agencies responsible for enforcing federal antitrust laws. In connection with the Company’s acquisition of Lincoln, the Company settled wit h the DOJ and agreed to divest certain Denver radio stations as described below under dispositions. In order to comply with the Federal Communications Commission’s rules, one of the Denver radio stations to be divested, KKFN FM, is currently operating in a trust, of which the Company is the beneficiary and the licensee. As of the date the Company issued these consolidated financial statements, the Company did not complete its review of the Lincoln financial information and its fair value allocation of th e assets and liabilities under purchase price accounting. Therefore, it is impractical to provide the effect of this acquisition on a pro-forma basis and other required business combination disclosures. Pending Exchange: Denver, Colorado, And Los Angeles, California On July 1 0, 2015, the Company entered into an asset exchange agreement (“AEA”) with Bonneville International Corporation (“Bonneville”) to acquire a radio station in Los Angeles, California, together with additional consideration of approximately $5.0 million in exchange for four radio stations in Denver, Colorado. On July 17, 2015 the Company entered into two time brokerage agreements (“TBA s”). Pursuant to these TBA s, on July 17, 2015, the Company commenced operation of the Los Angeles station and Bonneville commenced operation of the Denver stations. During the period of the TBA s, the Company: (i) include s net revenues and station operating expenses associated with the Company’s operati on of the Los Angeles station in the Company’s consolidated financial statements; and (ii) excludes net revenues and station operating expenses associated with Bonneville’s operati on of the Denver stations in the Company’s consolidated financial statements. The Company will incur no TBA expense to Bonneville for operation of the Los Angeles station and will receive $0.3 million of monthly TBA income from Bonneville. The fair value of the assets to be acquired in exc hange for the assets to be disposed of will be determined at a future time based upon an appraisal. The Company do es not anticipate that cash will be required to complete the Company’s obligations under the AEA. Upon completion of the AEA, the Company will: (1) own one station in Los Angeles, a new market for the Company; and (2) continue to own and operate five radio stations in the Denver market. The Company expect s that the AEA, which is subject to regulatory approval, will close in the second half of 2015. The Denver radio stations to be exchanged with Bonneville did not qualify as assets held for sale as of June 30, 2015. These assets may qualify as assets held for sale as of September 30, 2015, however, if closing with Bonneville does not occur a s of September 30, 2015. T he pending sale of the Denver station s did not me e t the criteria to classify the stations’ operations as discontinued, effective upon the commencement of the TBA. During the period of the T BA operated by the Company for those as sets to be acquired from Bonneville, it is expected that the Company will not recognize a variable interest entity (“VIE”). During this period, the Company will not be the primary beneficiary as Bonneville will be the entity absorb ing the majority of the p rofits and losses from the operation of the entity holding the Los Angeles, California radio station during the period of the TBA. During the period of the TBA for the trust assets operated by Bonneville, (KKFN FM), it is expected that the Company will deconsolidate the trust’s assets to be exchanged with Bonneville since Bonneville will remain as the primary beneficiary. As the primary beneficiary, Bonneville will absorb the majority of the profits and losses from the operation of the trust during the period of the TBA. During the period of the TBA for the assets operated by Bonneville other than the trust assets, (KYGO FM, KEPN AM and KOSI FM), it is expected that the Company will be the primary beneficiary and will be absorbing the majority of the p rofits and losses from those stations. Summary Of Completed Lincoln Transaction And Pending Bonneville Transaction By Radio Station
Markets |  | Radio Stations |  | Transactions
Los Angeles, CA |  | KSWD FM |  | Company acquires from Bonneville
Denver, CO |  | KOSI FM |  | Company disposes to Bonneville
Denver, CO |  | KYGO FM; KEPN AM |  | Company acquired from Lincoln and disposes to Bonneville
Denver, CO |  | KKFN FM |  | The trust acquired from Lincoln and disposes to Bonneville
Denver, CO |  | KQKS FM; KRWZ AM |  | Company acquired from Lincoln
Atlanta, GA |  | WSTR FM; WQXI AM |  | Company acquired from Lincoln
Miami, FL |  | WAXY AM/FM; WLYF FM; WMXJ FM |  | Company acquired from Lincoln
San Diego, CA |  | KBZT FM; KSON FM/KSOQ FM; KIFM FM |  | Company acquired from Lincoln

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